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spk00: Good day and welcome to the NOAA Holdings Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Jingbo Wang, CEO of NOAA Holdings. Please go ahead.
spk01: Thank you. Thank you. In the past two years, because of the epidemic, the global physical economy has been out of control and out of power. In addition to the influence of the Russian war, the global inflation has increased. In the first half of 2022, China's continued epidemic prevention and control policies have brought unprecedented challenges to the economic growth of the core areas of the Three Gorges and the Three Gorges of the Yangtze River. On the one hand, the supply and demand have been hit hard, and the demand has been significantly reduced. On the other hand, the expectation is weak. The second quarter of the economy is at the bottom, and the market is at the bottom. As the head office of a company in Shanghai, more than 1,800 employees were locked up at home during the second quarter. We observed significant changes in the investment sentiment of high-income families and private enterprises. Increasing the security and liquidity of assets is the first demand of customers. On the other hand, the global configuration needs of Chinese private enterprises and high-income families have been significantly improved. In the second half of 2022, Noya's judgment on customer needs and asset configuration suggestions Thank you. In the process of passive globalization of Chinese private enterprises and high-income families, there may be great progress, and there may even be unexpected surprises. Longya has been in business for 18 years and has gone through many market cycles. It is also lucky to suggest that customers withdraw from the status of moving into real estate in advance, as much as possible to protect the safety of customers' assets. Longya was listed in New Jiao in 2010. On July 13, 2022, it was successfully listed in Hong Kong 20 times and has also announced the opening of the transfer to the main listed companies. Today, I would like to express my sincere gratitude to the shareholders and investors who have given us a lot of support in the process of the second listing in Hong Kong. In a turbulent market environment, our international sales exceeded 5.9 times, and Hong Kong's public sales exceeded 3.3 times. Among them, the long-term value investors exceeded 2.6 times, and included many types of new institutional shareholders. It is very difficult in a low market environment. At the beginning of this month, after the board meeting was just opened, it approved the long-term annual bonus fund of Luo Ya.
spk02: On the agenda of today's teleconference, I will first share my views on the microenvironment, then introduce the overall performance of NOAA in the second quarter of 2022, the development of our major business segments, and our overall strategy. Next. Let's invite our group CFO Panqing to introduce the quarterly financial information followed by our Q&A. In the past two years, the global real economy deleveraging and capacity reduction caused by the epidemic and the impact of the Russian-Ukraine war have exacerbated global inflation. In the first half of 2022, China's continuous epidemic prevention and control policy have brought unprecedented challenges to the economic growth of core regions including the Pearl River Delta and the Yangtze River Delta. On one hand, the supply side has been impacted, and the demand side has contracted significantly. On the other hand, expectations are weakening, the economy reached the bottom, and the markets bottomed out in the second quarter. As the company headquartered in Shanghai, more than 1,800 employees experienced a lockdown at home in the second quarter. we observed that the investment sentiment of high net worth families and private enterprise clients has changed significantly. Improving the safety and liquidity of assets is the first demand of clients. At the same time, the global allocation needs of Chinese private enterprises and high net worth families have been significantly improved. NOAA's judgment on client demand and asset allocation suggestions are stability first, survival of the city, and domestic international due circulation for Chinese enterprises and high net worth families. We suggest that clients start a rebalancing of their global asset allocation. The ratio of Chinese and overseas asset allocation is 100 to 100. Domestic assets are allocated to the Chinese market, and overseas assets are allocated to the international market. Chinese private enterprises to establish new brands, or international headquarters in the overseas market and cultivate the international market completely independently. Domestic headquarters and international headquarters assume different functions. Over time, China's private enterprises and high-net-worth families may make great progress in the process of passive globalization and even have unexpected surprises. NOAA has been in business for 18 years and has experienced many market cycles. We're also lucky that we had suggested clients to withdraw from assets such as domestic real estate developers' bonds in advance and protected the assets of clients as much as possible. NOAA was listed on the New York Stock Exchange in 2010 and successfully listed in Hong Kong on July 13, 2022. We have also announced the start of the conversion to do primary listing. Today, I hereby sincerely thank the shareholders and investors who give us great support in the process of Hong Kong's secondary listing. Under the turbulent market environment, our global offering was 5.9 times oversubscribed, the Hong Kong public offering was 3.3 times oversubscribed, and specifically, we saw long-term value investors 2.6 times oversubscribed. During the secondary listing offering, we received support from many types of new institutional shareholders, which is quite an investor onboarding achievement in the sluggish market environment. At the beginning of this month, the Board of Directors approved NOAA's long-term annual dividend mechanism. We plan to pay dividends of no less than 10% of the annual non-GAAP net income in the future, aiming to deliver stable and sustainable return to shareholders.
spk01: The net profit of the general accounting standard is 3.6 billion yuan, with a growth of 5.4%, with a return growth of 13.3%. As of June 30, the total profit of 6.7 billion yuan has reached 46% of the annual profit and loss index. In terms of core business data, the second quarter's net profit is 193.2 billion yuan, with a drop of 22.7%, with a return growth of 28.8%. Of these, the private equity net profit is 39.2 billion yuan, with a return growth of 23.2%. The public fund is 122 billion, with a growth of 30% at the same time, and a big increase of 71.4% at the same time. This also makes us feel relieved. Although the market is low and there is insufficient confidence in customer investment, we are still willing to let Loya manage the larger amount of wallet. This quarter, due to the impact of the market environment and investment emotions, the overall resident savings rate has risen significantly, and the number of private securities fund deposits has dropped significantly at the same time and at the same time. High-end and ultra-high-end customers are our core customer groups. Loya's debt and black card numbers have been and stable growth. As of June 30, 2022, NOA diamond customers reached 6,774, with a growth of 6.1% in the same ratio. Black card customers reached 1,786, with a growth of 20.5% in the same ratio. While we continue to focus on diamond and black customers, we are also recognizing and serving light diamond and light black customers, as well as restoring lost customers and awakening sleeping customers. In terms of restoring lost and sleeping customers, we have achieved great progress this year. In the second quarter of 2022, NOAA achieved net revenues of RMB $738 million and a non-GAAP net income attributable to shareholders of RMB $355 million, up 5.4% a year and 13.3% quarter-on-quarter.
spk02: As of June 30th, the accumulated non-get net income was RMB 669 million, reaching 46% of the annual guidance. In terms of core business data, the transaction value of the second quarter was RMB 19.3 billion, a year-on-year decrease of 22.7%, and a quarter-on-quarter increase of 28.8%. Among them, the transaction value of private equity was RMB 3.9 billion, an increase of 23.2% quarter-on-quarter. Mutual funds were remaining $12.2 billion, up 30% a year, and 71.4% quarter-on-quarter. We're gratified by the outcome that although clients have insufficient investment confidence amid sluggish markets, they're still willing to let NOAA manage a larger share of their wallets. In this quarter, affected by the market environment and investment sentiment, the overall household savings rate have risen by a large margin. Our transaction value of private secondary funds dropped significantly year-on-year and quarter-on-quarter. High-net-worth and ultra-high-net-worth clients are our core client groups, and NOAA's diamond and black-card clients have been growing steadily. As of June 30, 2022, NOAA had 6,774 diamond clients, which grew 6.1% year-on-year. The number of black-card clients reached with a year-on-year increase of 20.5%. While continuing to focus on Diamond and Blackheart clients, we're also putting forth efforts on identifying and serving potential Diamond and Blackheart clients, as well as recovering lost clients and reactivating dormant accounts. In terms of recovering lost clients and dormant clients, great progress has been made this year. As of August 19th, we have recovered 714 lost clients this year.
spk01: As of June 30, 2022, Gefei's asset management size is 1554 billion yuan, and the distribution has been affected by the decline of the last quarter by 0.4%. The management size of the shareholding equity is stable at 1320 billion yuan. The management size of open market products has increased by 3% from the last quarter to 10.7 billion yuan. In terms of real estate funds, the majority is made up of the U.S. rental apartment fund and the write-down fund of the two commercial core areas in China. Gefei's overseas capital size rose by 6.2% and rose by 1.5%, reaching 29.6 billion yuan. The private equity public market real estate has achieved 1.1%, 6.4% and 2% return growth respectively. In terms of the first-class market, Gefei has completed the withdrawal of four projects in the second quarter. The S-class and the sixth-class are still in the middle. And as the second-class market stubbornly returns to the middle, investors in the S-class and the sixth-class have also entered a more secure stubborn edge. Gefei's private equity fund has completed a total of RMB2.6 billion in the second quarter. Gefei's target strategy products are stable, balanced, and positive. The three types of strategies, although the market environment is poor in 2022, but by August 12, this year's revenue will be 0.4%, negative 3.3%, and negative 4.7%. And Chongqi's Husheng 300 and Dongzheng 800 will be negative 15.2% and negative 14.6%. The performance of Gefei Target Strategy Fund is far superior to that of the same period. It effectively controls fluctuation and return, and plays a role in the compensation of wealth. At the same time, Gefei is also actively digesting stocks and capital products that complement each other in different strategies. After the second listing in Hong Kong, we began to establish a larger international private bank team in Hong Kong and a global selection of product teams to adapt to the global service and configuration needs of customers. Loya's Singapore office also began to introduce new business plans, As of June 30, 2022, Growth's AUM was aiming to be $155.4 billion, which slightly decreased by 0.4% compared with the end of the previous quarter due to more distributions.
spk02: Among them, the AUM of private equity stabilized at RMB 132 billion and public securities increased by 3% over the end of last quarter, reaching RMB 10.7 billion. In terms of GoFundMe's real estate AUM, it is mainly composed of the U.S. rental apartment funds and the office buildings located in two commercial core areas in China. GoFundMe's overseas AUM increased by 6.2% year-on-year and 1.5% quarter-on-quarter, reaching RMB 29.6 billion, with private equity, public securities, and real estate achieved 1.1%, 6.4%, and 2% quarter-on-quarter growth, respectively. In terms of primary market, Gopher completed the exit of four projects in the second quarter. The Series 6 of S-Fund continues to raise capital, and with a gradual return of the secondary market valuations, The investment of S-Fund has entered a safer valuation margin. GoFundMe's private equity funds raised the revenue fee $2.6 billion in the second quarter. GoFundMe's target strategy products have three types of strategies, conservative, balanced, and positive. Although the market environment in 2022 remains severe, as of August 12, the performances of the three strategies were 0.4%, minus 3.3% and minus 4.7% respectively, while that of CSI 300 and CSI 800 were minus 15.2% and minus 14.6% respectively in the same period. The performances of Gopher's target strategy funds have been far better than that of the comparable indices, effectively controlling volatility and pullbacks and playing the role of wealth stabilizer. At the same time, Gopher is also actively incubating different strategies and complementary equity direct investment products. After the secondary listing in Hong Kong, we began to establish a larger international private banking team and a global product screening team in Hong Kong to meet the global asset allocation and service needs of clients. Now as the Singapore office also began to promote new business plans, Gopher International has also started to build new research capabilities and enrich international product lines to meet clients' demand.
spk01: Loya's Sustainable Development Committee has been conducting regular and indefinite meetings since the establishment of Loya's Sustainable Development Committee in 2021, promoting investment decisions and product selection, and considering relevant EFG issues. At the same time, we improve the understanding of ESG partners in customer and business cooperation, assist in developing solutions, and regularly report to the board and management. Over the past year, our ESG popularization work has been effective. We conducted ESG tests on black-and-white customers in 2021. The results show that ESG's popularity among high-end customers has increased by 35% to 80%. Customer investment expectations have increased by 3.5 times to 50%. In May of this year, Gefei Real Estate issued an ESG questionnaire to the cooperative's asset manager, which showed that the ESG behavior of the head asset manager was more prominent in the past year. Most of the plans have begun to practice in more than 70% of institutions that have increased the proportion of ESG-related investment products in the next one to three years. At the same time, we are continuously enriching the exclusive area of ESG online investment products in China, and training ESG-specific investment consultants in the financial industry. Since its establishment in 2021, the Sustainable Development Community of NOAA Holdings has been practicing the value proposition that sustainable development brings long-term kinetic energy to NOAA.
spk02: It has held regular and irregular meetings to promote the inclusion of relevant ESG issues in the decision-making of investment and product selection to improve the ESG awareness of clients and business partners and regularly report to the board of directors and senior management. In the past year, our ESG promotion work was fruitful. We conducted ESG survey on the black card and diamond card clients in 2021 And the results showed that the popularity of ESG among high net worth clients increased by 35% and reached 80%. Our clients' ESG investment intentions increased by about 3.5 times to 50%. Grover also issued an ESG questionnaire to its investment partners in May this year. The results show that ESG behavior of the leading asset managers has become more prominent in the past year. Most of them plan to increase the proportion of ESG-related investment products in the next one to three years, and more than 70% of the institutions have started to practice. At the same time, we have constantly enriched the product offering of our dedicated online ESG investment sections, both onshore and offshore, conducted continuous ESG special investment consultancy training for our relationship managers, and implanted more ESG information and product information in internal and external media platforms. NOAA and GOPHA are duty-bound to continue to exert our circle influence, improve the research and development of ESG products, and enhance the sustainable operation of the group. 最后我想说前途是光明的,道路是取革的。
spk01: He was full of potential risks in his life. He set out to see Fangzhou with Gefeimu. He was well prepared for the possible flood. Loya was full of courage and had the right judgment. There were a lot of healthy species in Fangzhou. Loya and his team set out to see the future in Fangzhou. This is the meaning of Loya Fangzhou. It also seems to guide Loya to control his own mission, vision, and values. In 2022, we feel deeply responsible for our clients. Thank you. Sonia. Finally, I would like to say that the future is bright and the road is winding. There was an article entitled, Name is Strategy.
spk02: which said that the name of a company often contains a certain strategy. First, it contains a certain vision, planning, and intention. On the other hand, vision, planning, and intention will reversely shape our behavior. Noah's name is taken from the Bible. First of all, Noah was a righteous man. He chose to live an honest and upright life, regardless of the behavior of people around him. He insisted on giving trust and was full of awe for life. His life was full of possible risks. He took precautions and built the ark with gopher wood, making full preparations for the possible flood. Noah was full of courage, forward-looking, and correct judgment. The ark carried pairs of healthy species. Noah and them sailed to the future on the ark. This is the meaning of Noah's ark, and it seems to be a metaphor for Noah holding his own mission, vision, and values. In 2022, we deeply feel that we have a great responsibility to our clients The greater the macro uncertainty, the more we need to think calmly and make mature judgments. We believe that beyond wealth lies the wisdom of life. Now we devote ourselves to creating legacy for clients for generations to come. Next, let's invite CFO Panqing to introduce the financial data of this quarter in detail. Thank you.
spk03: Thank you. Thank you, Chairlady. And hello, dear investors and analysts. including our new shareholders who supported our second narrative in Hong Kong. Following the impact of major events such as geopolitical conflict in the first quarter, macro environment in the second quarter continued to be under pressure. As of the end of July 2022, the United States Federal Reserve has raised interest rates by a cumulative 225 feet. In China, prolonged COVID-19 lockdowns led to only a 0.4% GDP growth in the second quarter. Investor sentiment hasn't fully recovered, evidenced by distribution value of mutual fund products in a country decreased by 25.8% year-over-year in the quarter and dropped a whopping 57.8% year-over-year for the first half of the year, as well as the savings rate has risen to 34% as of the end of second quarter, compared to only roughly 30% pre-pandemic. At the same time, we're mindful of the tensions between the two largest economies in the world. In July, NOAA successfully completed the secondary listing in Hong Kong, partially mitigating the ADR delisting risk. This month, we have also announced to pursue a voluntary conversion to dual primary listing status in the US and Hong Kong, hoping to further resolve delisting pressure. We also installed a long-term scheme to pay at least 10% of our non-GAAP net income as annual dividends to shareholders starting from April next year. Now please let me walk you through more detailed results of the second quarter. Non-GAAP net income was RMB $355 million for the quarter, up 5.4% year-over-year and 13.3% quarter-over-quarter. For the first half, it was RMB 669 million, representing 46.1% of our full-year non-GAAP net income guidance. Income from operations of the quarter was RMB 323 million, a 3.6% decrease year-over-year, but a 3% growth over the last quarter, mainly because of the decreased net revenues for the quarter were partially offset by lower expenses, such as general administrative expenses marketing and spending, client activities, as well as more government grants received in the second quarter due to the COVID-19 lockdown in parts of China, especially in Shanghai. Consequently, the operating margin was 43.8%, up 17.4% year over year, and 11% quarter over quarter. With the orderly resumption of work in major domestic economic regions since June, It is encouraging to witness a recovery in transaction value as expected, which recorded a 28.8% increase over the last quarter from RMB 15 billion to RMB 19.3 billion, but compared to the last year, still down 22%, especially when we had a really strong second quarter last year. Noticeably, the transaction value of mutual fund products continues to grow against the market tide, with a significant increase of 71.4% quarter-over-quarter and a 30% year-over-year to RMB 12.2 billion. In the second quarter, the total number of mutual fund active coins was 11,248. The transaction value of private equity increased 23.2% over the last quarter to RMB 3.9 billion, but down 39% year-over-year, representing a quarter recovery that had been expected, while the transaction value of PE products saw a decrease of 40% quarter-over-quarter and 68.9% year-over-year due to the volatile market environment and less investor interest in the asset class, as expected. Benefiting from continuous strategic investments in our core client groups, Diamond and black card clients grew to 8,560, up 3.3% quarter-over-quarter and 8.8% year-over-year, among which the number of black card clients increased by 20% year-over-year. We have also been making efforts on reactivating dormant accounts and retrieving lost accounts due to the transformation to standardized products. Our client-centric philosophy will continue to be a key strategy in the long run. It's also worth mentioning that among active clients, the number of clients who purchased insurance products during the quarter was 1,009, 16 times more than the first quarter of 2022 and three times more than the same period last year, as we resumed the sales of certain products after resolving a temporary regulatory requirement in the first quarter this year. Now, revenues of the quarter was RMB $738.1 million, down 17.9% and 7.2% quarter-over-quarter, mainly due to decreases in performance-based income. As the transaction value of private equity mutual fund and insurance products recovered in the quarter, our one-time commission more than doubled quarter-over-quarter to RMB $207 million. but still down 16.1% year-over-year due to less public securities distributed. Recurring service fees remained relatively stable at RMB 458.9 million, a decline of 7.9% year-over-year and 5.2% quarter-over-quarter, mainly due to NAV adjustments. Performance-based income dropped to RMB 25.9 million, down 78.8%, and 85% quarter-over-quarter, primarily due to the lack of profitable exits from public securities. Net revenues from other service feeds for the second quarter of 2022 were RMB 46.4 million, a 44% increase from the corresponding period in 2021, primarily due to more value-added services NOAA offers to our high-net-worth clients since the Shanghai lockdown. Let me go back and do a quick correction. When I mentioned the transaction value of private products, so a decrease of 40% quarter over quarter, it should be transaction value of private secondary products. So a decrease of 40%. Now the segmented results. As for our segmented results, net revenues from the wealth management segment were on the fund $509 million. down 18.7% year-over-year and 12% quarter-over-quarter due to a slowdown in transaction value during the quarter. Now, revenues from the asset management segments were RMB 210 million, down 17% year-over-year, but up 5% quarter-over-quarter. Gophers AUM was RMB 155.4 billion as of June 30, 2022, slightly lower than RMB 156.1 billion at the end of first quarter due to more distributions and redemptions during the quarter. Moving on the balance sheet, we remain in a healthy liquidity position as the current ratio stood at 3.2 times. The debt-to-cash ratio was 19.4, still with no interest-bearing debt on our book. By the end of second quarter, we have RMB 3.6 billion in cash It should also be noted that net proceeds of the Hong Kong Secondary Listing have not been included yet until the next quarter. Supported by this healthy balance sheet and continuous strong cash flow generating capabilities, we announced that the Board had approved and adopted an annual dividend policy on August 10th. In normal circumstances, the annual dividends to be declared and distributed in each county year shall be in principle no less than 10% of the group's non-GAAP net income attributable to the shareholders of the preceding financial year, as reported in the company's audit financial statements, which aims to provide stable and sustainable returns to the shareholders of the company. The dividend will be subject to shareholders' approval at the AGM no later than the end of June each year. Once approved, the dividend shall be declared by the company and paid out to the shareholders Being confronted with the current complex international geopolitical environment, the board had approved a motion to pursue the voluntary conversion to dual primary listing on Hong Kong exchange, which will further eliminate the risk of USD listing. We want to thank the investors who supported the Hong Kong secondary listing and hope to provide the market with positive outcomes in the coming months. Our CIO office, also published the investment outlook for the second half of 2022, reiterating the protection before growth strategy for our clients. Meanwhile, we suggest our clients to initiate investment strategic layout, both onshore and offshore, also known as dual circulation. We're mindful of changing and challenging market scenarios and will adjust our strategy accordingly. Again, we sincerely thank our shareholders for ongoing trust and support and strive to create long-term value for our clients and for our shareholders. Thank you, everyone, for listening, and I will now open the floor for questions.
spk00: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then 2. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Chi-Yao Hung with Morgan Stanley. Please go ahead.
spk05: Good morning, Mr. Guan. I have two questions I'd like to ask. The first is about the customer base. We see that in the market environment where the second quarter continues to fluctuate, we still have a steady growth of the entire black market. I would like to ask what are the main driving forces behind it, and then we have any growth goals or plans for this year or next year in terms of the number of customers. And then the second question is about this financial team, because we see that it is the growth of high-quality customers, but at the same time it also needs a corresponding the growth of the financial team to maintain the strength of our service and customer engagement. So, overall, the financial team's number has been fluctuating from 1,200 to 1,300 in the past two years, and the recent two-year cycle has not decreased at all. I would like to ask that after we completed the new system last year, as well as the change in KPI, how do we adapt to the financial team? What are the main feedbacks? And then, in the next two or three years, do we have any goals in terms of the number of financial teams? Maybe I'll just briefly translate. The first question is about the client base. We're delighted to see, given a very evolved market environment, we're still achieving a steady growth in the number of key clients in LandCore and DiamondCore. So just wondering, management, if we can share any of the driver behind, and do we have any target or plan for the client number growth this year or next year? And second question is on the number of relationship managers, which we think is important to keep a high-tech service. And we see the number kind of fluctuating between 1,200 and 1,300 in the last two years, and with some slightly decline in the past two months to two quarters. So I wonder how's the team's reaction or acceptance to the newly completed restructuring on the compensation and KPI system, and do we have any target for the next two to three years? Thank you.
spk03: Okay, thank you, Mr. Heng. Ms. Wang, what do you think?
spk01: I think the business environment is still quite complicated, especially with these policies that make it difficult for us to meet and contact customers directly offline. So I think the growth of customers, especially the development of J&J, is mainly due to the improvement of old customers. We also mentioned that the nearer we are, the farther we are. If we serve our customers in a good way, then there will be a lot of customers who will introduce us and will continue to be in our warehouse. I think this strategy is effective this year, especially during the epidemic lockdown, because it is difficult to establish the trust of a stranger customer. This is one of the main reasons. This is my opinion. The second one is about the expectation of the growth of the financial system. We still hope to maintain growth, but it The most important thing is to be successful. Because in this process, we are still recruiting ourselves very much, including introducing excellent graduate students. For us, this is a difficult moment. If we can insist on recruiting excellent, we also have a project called recruiting and landing. I don't want that. I want to go to New York. I want to go to New York. I want to go to New York.
spk03: Okay, so to your first question, I would believe that because of the complex situation, especially face the lockdown, so it's quite, it has been quite difficult to get to the client scenario, especially in the offline situation. So what we have been doing is really to serve and make the existing client base increase their satisfactory level. And the majority of the growth achieved in the Diamond Blackheart client tier is from the existing clients when they actually made more investments and operate internally. And at the same time, the strategy of making the existing client happy and they are more willing to actually bring in their clients and make referrals. So we actually have another program called MGM, Member Get Member, which have shown actually very positive progress as well. It seems that the strategy has been working. And just a little bit of supplement to what Chair Lady has mentioned, another thing is that we have been continuously investing and upgrading our branding as well as the benefits system that's associated with the black card and diamond card members. In the past, it's mostly probably just some rebates or some points that's associated with benefits. But this time, we actually added a lot more benefits in terms of free classes, free lessons they can get on investors, as well as some other educational sessions, which actually being very welcomed by the client. basically internal system during the lockdown. We actually had more time to invest as well as upgrade that system to actually increase the factory level of the clients greatly. In terms of the relationship managers team, obviously we're still eyeing for growth, but I think the strategy for this year is mainly for making a room for better talents, to come in and to upgrade the talent mix, especially we're investing more heavily towards the, you know, fresh graduates from good schools. I want to make sure actually we have a younger pipeline for the future RMs team. At the same time, also actually having another program called Zhaoyou Jingluo, which means that we're actually targeting to recruit good veterans into NOAA. And... So the overall strategy undoubtedly will be towards the growth of our team. But at the same time, we want to make sure that the quality is well selected. We're also actually investing, planning to invest quite heavily in terms of teams that's in Hong Kong and Singapore. We'll probably see a greater growth speed in that team in these two places. Shijia, do we have your questions?
spk05: Yes, thank you very much, Tim, and thank you.
spk00: Okay, thank you. Again, if you have a question, please press star, then 1. Our next question will come from Peter Zhao with JP Morgan. Please go ahead.
spk04: Hi. My question is about the forecast for the second half of the year. Because we see that the management has maintained a gap-proof forecast, I would like to ask the management I will do the translation. So my question is about the second half outlook, because we noticed the management has maintained our non-GAAP focus, which will translate to a quite strong growth in second half non-GAAP profit growth. So we are wondering what will be the key driver and what's the WMP sales outlook in second half? Thanks.
spk03: Okay. Thank you, Peter. Appreciate your question. Yeah, we actually are, you know, really happy, especially with the challenges that we faced in the second quarter, especially one of our main cities. Shanghai, which is also the headquarter of NOAA, faced two months of lockdown and to be able to actually obtain a 46% progress and actually the non-capital income actually is growth over both last quarter as well as year over year. So we believe that we're still on track to make the four-year guidance, especially for the industry seasonality. Majority of the big so-called client conferences and marketing events usually occur in the second half of the year. For example, we have which are both the end of year as well as beginning of year major marketing points as well as the main event of Black Card Gala. Every year usually takes place in November and December. We still believe that, you know, good wave of marketing events as well as the client conference are waiting to happen. Obviously, you know, we are prudently optimistic about, you know, how the client sentiment will be before the, you know, big conference in probably October and November. But we believe that no matter what the outcome is, once our clients' sentiment actually see some sort of level of certainty, they will definitely have a higher sentiment of making, you know, especially investments, and probably easier for them to make investment decisions. So that's primarily the reason behind.
spk01: I think the market environment is still serious. But this has also inspired us internally. I think every time it is difficult, it is actually a company that reflects the ability to manage and promote the process of business reduction, which is the survival of the fittest. In the past, in fact, Luo Ya was not so aggressive in the market compared to some other institutions. But we have our own rhythm. Then I think now, in fact, it is also a very important opportunity for us to be able to practice internal work. I am also communicating with our core team, which is to meet the current market environment. What do you think is the biggest challenge? One is internal management, one is the market, one is competition. I think our team, everyone thinks that the most important thing for us is to improve our internal management, to reduce the cost-effectiveness, and then it is the market. Thank you. Thank you.
spk00: Again, if you have a question, please press star, then 1. This will conclude our question and answer session. I would like to turn the conference back over to Grant Pan for any closing remarks. Please go ahead.
spk03: Thank you, operator, and thank you very much, our investor. We have two quarters to go, and we're striving to get positive results for the market. Thank you very much for your time.
spk00: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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